ShapeShift Settles $750K Sanctions Violation with U.S. Treasury

Defunct cryptocurrency exchange ShapeShift has agreed to pay $750,000 to resolve allegations of sanctions violations by the U.S. Treasury Department. The settlement addresses claims that the platform facilitated transactions for users in sanctioned jurisdictions, including Cuba, Iran, Sudan, and Syria, between 2016 and 2018.

The Treasury's Office of Foreign Assets Control found ShapeShift processed over $12.5 million in prohibited transactions before implementing a compliance program. "IP address data provided clear indications of user locations in sanctioned regions," the agency noted, emphasizing the exchange's delayed response until after receiving a subpoena.

Founded by crypto pioneer Erik Voorhees, ShapeShift operated as a non-custodial platform before shuttering in 2021. The case underscores growing regulatory scrutiny of cryptocurrency businesses' compliance frameworks, even for discontinued operations.